Canary Wharf to get tallest U.K. residential tower

The Herstmere residential tower stands, left, in the Canary Wharf business and shopping district in London in this undated handout illustration released to the media Thursday. (Bloomberg News: Squire Architects rendering)

A London developer plans to build the tallest residential tower in the U.K. on a site in the city’s Canary Wharf area.

Ryan Corporation U.K. Ltd. paid 100 million pounds ($160 million) for the site of the proposed skyscraper, the closely held company said Thursday in an emailed statement. The 794-foot-high tower would be the tallest in London’s second-largest financial district, and the apartments would have a total value of more than 1 billion pounds ($1.6 billion) when it opens in 2018.

Luxury homes in central London have been the best- performing part of the U.K. property market since at least 2009. Prime residences in the U.K. capital have risen more than 60 percent from their low that year, according to broker Knight Frank LLP.

“Londoners are used to office buildings going up and coming down every 20 years or so,” Richard Berridge, chief operating officer of Ryan Corporation, said in the statement. “This doesn’t happen with residential towers” as they need to be “more enduring,” he said.

Ryan has planning permission for a mixed-use development on the site of about an acre, according to the statement. Ryan will apply to the local government for permission to build the residential tower, named Herstmere, at West India Dock Quay.

Berkeley Group Holdings Plc’s tower at One St. George Wharf is currently the U.K.’s tallest residential tower at 594 feet, according to Knight Frank. While apartments in London’s Shard skyscraper are higher, the building consists mainly of offices, a hotel and restaurants.

More than 250 million pounds ($403 million) had been spent on land for homes in Canary Wharf and the surrounding area known as London’s Docklands this year, and an additional 2 billion pounds ($3.2 billion) must be invested to pay for the planned projects, Chicago-based broker Jones Lang LaSalle Inc. said in an Oct. 8 report.

Oxley Holdings Ltd., a Singapore- based property developer, plans to build 3,400 homes at the Royal Docks after agreeing to buy a 40-acre site from Ballymore Properties Holdings Ltd. for 200 million pounds ($322 million) on Nov. 1.

U.K. house prices slipped in September from a record level in August. They were 3.8 percent higher than a year earlier, the fastest annual growth rate since 2010, according to data from the Office for National Statistics released Nov. 12. The increase was led by London, where home values jumped 9.4 percent.